NASA has to fudge the latest cost estimates for the SLS launch tower.

NASA's problems with the mobile launch tower that will support a larger version of the Space Launch System rocket are getting worse rather than better.

according to New report The estimated cost of the tower, which will be slightly taller than an American football field including its wings, is now $2.7 billion, according to NASA’s inspector general. That’s more than double the funding needed to build the world’s tallest building, the Burj Khalifa, which is seven times taller.

That represents a significant cost explosion. Just five years ago, NASA awarded Bechtel Engineering a contract to build and deliver a second mobile launcher (ML-2) for $383 million, with a deadline of March 2023. That deadline came and went while Bechtel had barely begun cutting metal.

NASA estimates the tower project will now cost $1.8 billion, with completion scheduled for September 2027. However, the new report, released Monday, concludes that NASA’s estimate may be too conservative. “Our analysis suggests that costs could be higher, in part, due to the significant amount of construction work remaining,” the report, signed by Deputy Inspector General George A. Scott, said.

Bigger rocket, bigger tower

NASA commissioned the launch tower—at the explicit direction of the U.S. Congress—to support a larger version of the Space Launch System rocket known as Block 1B. This combines the rocket's existing core stage with a larger, more powerful second stage, known as the Exploration Upper Stage, under development by Boeing.

The space agency expects to use this larger version of the SLS starting with the Artemis IV mission, which aims to deliver the crewed Orion spacecraft and a component of the Lunar Gateway to orbit around the moon. This will be the second time astronauts have landed on the moon as part of the Artemis program. The Artemis IV mission is scheduled to launch in 2028, but the new report confirms the space community’s long-held assumption that such a date is unlikely.

To get the mission to launch in 2028, NASA said it needs to complete the ML-2 constellation by November 2026. NASA and the new report agree that the chance of that happening is zero percent. So if the Artemis 4 mission uses the upgraded version of the SLS rocket, it almost certainly won’t launch until mid-2029 at the earliest.

But why did costs and delays rise so high? One reason cited in the report was Bechtel’s continued underestimation of the scope and complexity of the project.

“Bechtel significantly underestimated the number of man-hours required to complete the ML-2 project and, as a result, incurred more man-hours than anticipated. From May 2022 to January 2024, the estimated overtime doubled to nearly 850,000 hours, reflecting the company’s efforts to meet NASA’s schedule goals.

It is difficult to hold Bechtel accountable.

Among the new report’s most important findings is that NASA appears to have limited leverage over what it can do to incentivize Bechtel to build the mobile launch tower faster or at a more reasonable price. The cost-plus-profit contracting mechanism gives the space agency limited leverage over the contractor beyond withholding award fees. NASA declined to exercise an option to convert the contract to a fixed-price mechanism, the report notes.

“While the option remains formally in the contract, NASA officials have told us they do not intend to request a fixed-price bid from Bechtel,” the report said. “The Exploration Ground Systems Program and the ML-2 Project Management Team have told us they assume Bechtel is likely to submit a cost bid that far exceeds NASA’s financial ability to bear the additional risk that comes with a fixed-price contract.”

In other words, since NASA did not initially require a fixed-price contract, it now looks as if any offer from Bechtel would blow a hole in the agency's annual budget.

The rising costs of the mobile launch tower have been a source of frustration for NASA Administrator Bill Nelson. In 2022, after estimates of the cost of the ML-2 mobile launch tower approached $1 billion, Nelson criticized the additional cost mechanism while testifying before the U.S. Congress.

“I think this is the plan that can bring us all value in competition,” Nelson said of the fixed-price contracts. “You can do it in that competitive spirit. You can do it at a lower cost, and it allows us to move away from what has been a plague on us in the past, which is the cost-plus-profit contract, and move to a contract price that is there.”

The plague continues to spread.